TBEC Grid Benefits

Grid Benefits of Transaction Based Energy Controls

By Chris Fernandez

Currently, buildings account for over 40% of total US energy consumption, and approximately 70% of US electricity usage. Over the past half-century, improvements in building codes have helped to improve these figures in the construction of new buildings, but existing buildings still have significant efficiency issues. As power demands continue to climb, there is an increasing strain on the aging utility infrastructure of the US.

Cutting down on waste energy will reduce this strain by minimizing unnecessary energy demand. The energy waste is largely due to a lack of sensors and control systems to measure and regulate energy usage. However, there are significant efforts being made to develop new technology for the benefit of both the utility grid and its customers.

Smart Buildings Revolution
The Pacific Northwest National Labratory’s Reference Guide for a Transaction Based Building Controls Framework proposes modeling the grid with a nodal structure. These node models incorporate individual buildings, as well as higher level nodes that make up the grid itself. The higher nodes communicate with lower nodes in real time, constantly balancing power demands while minimizing costs.
On a technical level, these nodes would be needed to represent each location where energy is transformed in some way. Generators, transformers, independent system operators, customers, and distribution feeders would all need to be involved as nodes in the power network. Each node can make bids for energy it needs and make offers to sell energy to other nodes. This would allow each node to allocate energy in real time, allowing market forces to minimize cost based on each node’s demand.
There is currently a lack of simple, standardized control hardware and software needed to make this nodal approach a reality. A key theme of the developing technology is flexibility. It is believed that in order for widespread acceptance to take place, the new Advanced Metering Infrastructure (AMI) must be flexible enough to tailor to the needs of individual buildings, owners, and tenants.

How does this help the utility grid?
The lower energy cost obviously benefits the customer, but transaction based control provides benefits for the grid infrastructure as well. The bidding nature of buying energy allows the grid to view buildings as dispatchable assets that can benefit the grid in several manners.
1) Integration of Renewable Energy
Renewable energy is a rapidly growing industry, influenced by increasing environmental pressure as well as efficiency improvements from developing technology. It is becoming more and more popular for individual buildings to install some form of renewable energy to help with energy costs. However, many forms of renewable energy, such as solar and wind power, naturally fluctuate the amount of available energy as the weather changes. This creates problems for the traditional energy grid, as it becomes increasingly difficult to monitor total output as more renewables are added to the system.
By introducing smart meters and control systems, individual buildings will be able to communicate in real time how much renewable energy they are producing. This will allow the grid to automatically make decisions about how to manipulate power flow in order to meet demand, while efficiently prioritizing the usage of renewable energy.

2) Improve Reliability
By organizing the distribution of energy by means of digitally implemented market forces, the grid is able to operate at a higher level of reliability. Individual buildings can be leveraged to absorb energy fluctuations, resulting in a more stable grid overall. The grid is constantly in a state of stable flux, as loads and generators change in response to customer energy use. Transaction based control allows the grid to automatically stabilize these localized fluctuations with localized adjustments. Corrective action can take place at the source of the error.
By accurately measuring and communicating an individual building’s power generation and consumption, the utility grid is able to more appropriately designate and deliver power to all customers. This can also lower the grid’s need to invest in capacity, and in turn lower the costs of wholesale energy production.
3) Fault Protection
The grid also benefits from a greater degree of individual building energy control in the case of a fault. With more accurate information from each building, it is easier to identify the extent of the fault and find new avenues to bypass the damaged equipment and minimize outages.

Will this actually work in the real world?
Currently, there are two demonstrations of transactional building-to-grid networks in testing. The largest is the Pacific Northwest Smart Grid Demonstration (PNWSGD), which is a $178M, 5yr project. The project is led by the Battelle Memorial Institute and involved the states of Washington, Oregon, Idaho, Montana, and Wyoming. Customers who chose to buy power at a real-time rate were given advanced controls and smart sensors which would allow their thermostat to respond to fluctuations in price. Price information is automatically communicated between the customers’ equipment and the grid in real time.
Each customer’s thermostat was programmed with their allowable error range, and the thermostat would balance this need against the real-time cost of energy to maintain the appropriate ambient temperature at the lowest possible cost. In this way, customers could choose to have a lower energy bill in exchange for greater temperature fluctuations around their desired setting. Concurrently, a higher level management node prioritized every customer’s energy requests by balancing each thermostat’s needs while minimizing total cost across the system.
It may still be some time before the necessary technology is mature enough to bring transaction based energy control to scale in the US. However, the work being done by the PNWSGD is building a strong case for further investment and research into this technology. Coupled with hardworking and innovative engineers, this economic model could prove to be the most effective method for powering the future of the United States.


February 25, 2015
Chris Fernandez
Binghamton University – MSEE 2015

For more information, please visit these sources:
  • Pacific Northwest Smart Grid Demonstration
  • Microgrid Institute
  • Reference Guide for a Transaction-Based Building Controls Framework. Pacific Northwest National Laboratory, Richland, Washington, 99352. Prepared for the US Department of Energy, April, 2014. PNNL-23302. Pages 1-4, 35-37, 49-51, 60, 88, 108, 130-133